Frozen Meal Maker Hopes to Deliver

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E-commerce sites in Los Angeles have tried to own a portion of people’s closets, dressers and bathrooms. Now, Pop-Up Pantry in Hancock Park is taking the monthly subscription model to a new place: the dining room table.

At least twice a month, members of the five-month-old site get a three-course frozen dinner delivered to their door. Once the food is thawed, reheated and plated, it’s supposed to replicate the kind of food you’d see on a cooking show or at a trendy L.A. eatery.

Forget the frozen Stouffer’s lasagna, say company executives, Pop-Up Pantry customers are choosing from celebrity chef-designed dishes, including ginger-glazed halibut and wild boar ragu.

“You’d order this food in a nice restaurant. That’s the goal with our offerings,” said Tom Balamaci, who co-founded Pop-Up Pantry with David Hauslaib. “Our most popular items are comfort food with a twist.”

As the company grows – executives declined to give revenue but said membership numbers have doubled each month since it launched in July – it’s facing competition from fellow entrants to this very young field. Recently, San Francisco’s Munchery announced plans to expand its gourmet food delivery service to Los Angeles early next year.

There are distinct differences in the two companies’ scopes: Pop-Up Pantry ships its meals throughout the country, while Munchery confines its service to specific geographical regions (right now, that’s just the Bay Area). And while Pop-Up Pantry’s frozen food is delivered only Wednesday through Friday, Munchery’s is refrigerated and delivered daily.

However, beyond any competition, the biggest threats facing these companies as they try to make inroads in the United States’ $1.5 trillion food industry might be the enormous cost of transportation. It’s felled many tech companies in the past, notably Foster City’s Webvan.com, which ran a popular grocery delivery service that lost millions in overhead costs before declaring bankruptcy in 2001.

As opposed to delivering shoes, these e-commerce sites are selling a temperamental product that needs to be chilled and delivered fast yet carefully. It’s all possible – but for a price.

“Your cost of delivery for small specialized food items is astronomical,” said Alex Auerbach, a spokesman and director at Vernon’s Overhill Farms Inc., a large manufacturer of frozen foods sold in grocery stores. “For anyone but the most affluent consumers, it would be unaffordable.”

Dinner plans

Braving this perilous market is a tall order for the Pop-Up Pantry co-founders, especially given that they’re complete novices to the food industry. Hauslaib made a name for himself in the online content world by creating popular celebrity-gossip blog network Jossip. Balamaci worked for a number of tech and entertainment companies in Los Angeles including Beverly Hills’ Myspace Inc., where he served as director of business development.

The two met up a few years ago, when shows such as Bravo’s “Top Chef” and Gordon Ramsey’s cadre of cooking programs were creating a culture of food lovers. Meanwhile, a wave of e-commerce sites, including fashion sellers Fab.com and Gilt Groupe, had begun to pop up. While shoes and clothing were well-trod territory for these companies, few tried to tap into the growing number of foodies.

“Nobody was taking the food that you see in magazines and TV and bringing it to people’s homes,” Hauslaib said, gesturing to a crispy, tennis ball-size serving of risotto arancini – one of the appetizer options for a Pop-Up Pantry meal. “It also took the growth of e-commerce and people’s comfort for buying things online for this to work. We couldn’t have started this five or six years ago.”

The company went through Santa Monica tech accelerator Launchpad LA, and later raised $1.7 million in an initial round that included Century City’s GRP Partners, Crosscut Ventures in Santa Monica and actor Neil Patrick-Harris. Pop-Up Pantry works out of a high-windowed artists’ loft that’s spitting distance from Pizzeria Mozza in Los Angeles. The company, currently with seven full-time employees, also has a commercial kitchen in Torrance, where the food is prepared, frozen and shipped.

Delivering gourmet food that’s a good facsimile of a high-end dining experience might prove challenging. Cooking food, then freezing and reheating it, fundamentally changes the texture and flavor; making it work is just as much science as it is cooking.

“It doesn’t matter if you have the best ingredients or best chefs – everything is different with frozen foods,” said Overhill’s Auerbach. “Doing it wrong would make leftovers look gourmet.”

Indeed, online reviews are mixed.

“The meal looked good but it wasn’t the best,” wrote Kimberlee Van Der Wall on her blog ihaveadegreeinthis. She had the seared halibut, which she found chewy – though she liked the sesame bread pudding. Another blog dubbed the heirloom pot pie “bland, broken and blah,” but was more generous about the pumpkin cranberry roulade. (Desserts, it seems, garner the highest praise.)

The culinary team at Pop-Up Pantry is led by chef David Yeo, who’s worked at several high-end restaurants including New York’s famed French joint Le Cirque.


Gourmet vibe

A finished food item is placed in a vacuum pouch, sealed and then chilled to -22 degrees Fahrenheit. Meals arrive at a customer’s house packaged in a large plastic foam box that’s cooled with a large block of dry ice. Most food is reheated by boiling it in the pouch or taking it out and warming it in the oven. When possible, the presentation tries to evoke a gourmet restaurant vibe: It comes with a prix-fixe-style menu as well as instructions that include plating tips and wine pairings.

While Pop-Up Pantry might be working to elevate the quality of frozen foods, it’s also raising the company into the stratosphere of subscription e-commerce prices. Few of the successful players in that market charge more than $40 in its monthly fee. The lowest level subscription for Pop-Up Pantry’s customers is a two-meal plan for $90 a month; it tops out at eight meals for $280 a month (each “meal” serves two, so a two-meal plan serves four people). Execs said they need to cover the high costs of ingredients and shipping in that price.

“It’s a self-selecting group of customers who are going to spend that amount of money on food,” said Hauslaib. “But if you look at the cost of a three-course meal at a nice restaurant for two, plus factor in the cost of driving there, we think it averages out to be a great deal.”

Munchery founder Tri Tran thinks his company has a better option for consumers trying to get good food delivered. His doesn’t use the subscription model and it allows people to purchase individual servings, which generally cost $12 a plate – though that doesn’t include shipping costs. Because the dishes are not frozen, prep times are rarely longer than eight minutes, compared with Pop-Up Pantry’s standard 30.

Munchery also handles its own delivery and does it daily, so a hungry customer can order a dish in the morning and have it arrive just before dinner time.

“At the end of the day, Pop-Up Pantry delivers frozen food. I think that’s a big issue,” said Tran, who said his company has built up revenue of $1.7 million since it launched earlier this year. “Our food is made fresh daily. Things like fresh vegetable salads – you can’t get that if it’s frozen.”

Balamaci declined to comment directly on Munchery, though he said Pop-Up Pantry’s frozen-food system works better than refrigeration because it can be stored longer. As the company ramps up its production, he added that options like next-day delivery service are likely to come.

Balamaci also contended that Pop-Up Pantry’s nationwide reach gives consumers outside urban areas access to the latest food trends (the company said it has a good number of customers in rural Pennsylvania).

He’s adamant that Pop-Up Pantry’s real competition isn’t just other food delivery services, but any company involved in the food industry, from a restaurant to a grocery store. As long the service is being considered in the array of meal choices, execs said they’re moving in the right direction.

“The fact that there are so many people in the food space is a sign that the market for a high-quality meal has exploded in the past few years,” said Balamaci. “The more people that want better quality food, the better it is for us as well as the consumer.”

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